Driven By Investments In Manufacturing, Private Sector Capex In India Jumps By Over 145% In FY 2022

Driven by new investments in manufacturing, capex by private sector in India saw a 145-150% increase in FY22, compared to FY21/FY20, according to a research report published by Goldman Sachs.

Manufacturing sector, which has been a laggard for multiple years, saw an increase of 210%-460% in FY22, compared to FY21/FY20, the report added.

While the increase was helped by mega project announcements (especially in the Steel sector), the overall number of projects announced across also saw a sharp increase by 80%-140% in FY22, compared to the previous two fiscals.

Contract awarding witnessed an overall increase of 55% year-on-year in FY22 with manufacturing sector recording an increase of 135% year on year.

Growth in awards in infrastructure has been decent as well, primarily driven by higher activity in the roads sector.

New tenders also saw an increase compared to FY20/21. However, compared to FY18/19 the overall tendering activity (which is primarily for Government orders) has been flattish, Goldman Sachs report noted

The flattish trend in tendering is seen as a pointer to lower levels of activity in the next few months from an award perspective.